The Metaverse Overview : Vision, Technology, and Tactics | Industry NFT business and circulation models Participants in NFT circulation are either upstream-creators, midstream-platforms, or downstream-bidders. Figure33: NFT circulation Upstream Midstream Downstream Creators NFT Platforms Deals / Bidders Mainly Individual • Global: OpenSea, Young People: Creators: 90% Individuals; SuperRare, Nifty 58% Millennials, 33% 10% Teams Gateway, Rarible Gen X • China: Ali Auction, AntChain, Tencent Magic Core Source: Public information, Deloitte analysis NFTs generate value at every link, including gas fees charged by blockchains, sales and trading fees charged by platforms, and copyright payments to content creators. Typically, upstream creators pay gas fees to a blockchain when creating an NFT. They then pay gas fees to the blockchain and commission to a platform when the NFT is published. Creators also collect transaction fees from buyers, and buyers pay gas and platform fees. If the NFT is traded again, the creator receives a copyright fee and the platform charges a resale service fee. The seller collects the NFT payment and pays resale service, royalty income, and gas fees. The buyer pays for the NFT and pays gas fees too. Figure34: NFT value distribution Value Value NFT Market Value Distribution Distribution Attribution Creation Issue & sell Transfer 1 Infrastructure layer Gas fee Gas fee Gas fee creation layer (creator) not in the chain: 0 without platform: sales Royalties Gas: a Gas fee is needed Blockch within the chain: Gas revenue-Gas fee for recording creation and ain fee with platform: first transaction information sales revenue-Gas fee on the blockchain creation layer (primary first sales revenue transfer platform) 2 creation layer (secondary resale service fee transfer platform) Sales/Resale Services collector (seller) resale revenue-resale Fee: service fee-royalties-Gas NFT transactions Creation fee through the platform Platform collector (buyer) issue revenue-Gas fee resale revenue-Gas fee need to pay the platform certain service fees Examples of Main NFT Market 3 Established Entry Forms of First Sales Resale Service Royalties of Time Creators Service Fee Fee Creators Sales Revenue, OpenSea 2017 Not Set 2.5% 2.5% 10% Royalties: creator’s income comes from the Creator SuperRare 2018 Application 15% 3% 10% sales income in the Nifty 2018 primary market and the Gateway Targeted circulation royalties Invitation and - 5%+0.3USD Self Design income in the Application secondary market Rarible 2019 Application 2.5% (in the price) 2.5% (out of the price) Up to 50% Source: Public information, Deloitte analysis 39